Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

186. To ask the Minister for Employment Affairs and Social Protection if safeguards will be put in place to enable pensioners have a greater say in the governance of their pension scheme in view of the fact that many defined benefit pension schemes are closed to new members and that pensioners constitute a growing percentage of scheme memberships; and if she will make a statement on the matter. [19234/18]

Regina Doherty (Meath East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The governance of an individual pension scheme is generally a matter for the scheme trustees. Scheme trustees have duties and responsibilities under trust law, under other relevant legislation and under the Pensions Act, 1990, as amended. The duties of pensionscheme trustees include administering the trust in accordance with the law and the terms of the trust deed and rules. It is important to note that pension scheme trustees have no function in negotiating improved benefits and entitlements for members under a pension scheme. Trustees must act in the best interests of all scheme members whether active, deferred, or retired. Consequently any decisions made by corporate or individual trusteesof an occupational pension scheme are governed by the relevant legislation. The provisions of the Pensions Act are enforced through the supervision of the PensionsAuthority.The Pensions Authority makes information available on its website to assist members, employers and trustees understand the procedures for member participation in the selection of trustees.

Arrangements for member participation will usually be made following discussions between the employer and representatives of members. These discussions will cover such matters as the overall number of trustees and the arrangements for the selection of a proportion of this number by members. Specific rules on all these matters are set down in the regulations which can be invoked, as necessary

While current legislation does not specifically provide that member trustees must include at least one or more pensioner members (nor does it provide that member trustees must include one or more active members) it does provide an opportunity for such membership and pensioner members may avail of that opportunity to become scheme trustees or nominate others to act on their behalf. It is not intended to make any legislative amendments in this area.

I hope this clarifies the matter for the Deputy.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

187. To ask the Minister for Employment Affairs and Social Protection her plans to introduce measures to specifically protect retired members of defined benefit pension schemes particularly in view of the fact that pensioner groups only have one month to appeal the decision of the pension fund trustees to make an application for a section 50 order to the Pensions Authority for reduction in pension benefits to the courts; and if she will make a statement on the matter. [19235/18]

Regina Doherty (Meath East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If the funding of a pension scheme is not sufficient to satisfy the Funding Standard, the trustees may apply to the Pensions Authority for a direction under section 50 of the Pensions Act 1990. Under such an order accrued benefits relating to members’ past service can be reduced. Prior to making an application to the Pensions Authority, trustees must have undertaken a comprehensive review of the scheme with a view to the long term stability and sustainability of the scheme. Before making an application for a section 50 direction, the trustees must notify in writing, all members of the scheme and any other person in receipt of benefits under the scheme, and also notify any authorised trade union representing members, or any representative group that meets certain requirements.

Scheme members subject to a Section 50 amendment must be notified in advance of the proposed reductions. This notification must include the circumstances of the Section 50 application, and the proposed reductions, including general illustrations of their effect.

Pension schemes are run for the benefit of all its members, active, deferred, and retired. It is important to note that all pension scheme members, not just pensioners, have one month to make written observations to trustees on proposed section 50 applications to the Pensions Authority. Trustees must consider these observations before making an application to the Pensions Authority.

The provisions in section 50 of the Pensions Act have been reviewed on a number of occasions in recent years. Changes to this section of the Act were made in 2009 and again in 2013. The Social Welfare and Pensions Act 2013 amended section 50 of the Act to broaden the options available to the trustees of a pension scheme when considering a restructure of scheme benefits. These changes were designed to spread the risk of scheme underfunding across all scheme members and beneficiaries in any consideration of an application by the trustees of the scheme to restructure scheme benefits. It is a matter for the trustees of a scheme, who are required under trust law to act in the best interests of all scheme members, to determine how the provisions in section 50 of the Act might be applied.

I hope this clarifies the matter for the Deputy.